Delisting from bourses: History shows investors don't part with shares easily

The initial months of the financial year 2021 (FY21) saw a slew of delisting offers announced by India Inc. Vedanta and Adani Power announced their delisting proposals in May while Hexaware and Allcargo made the announcements in June and August, respectively. While Adani Power and Allcagro’s delisting proposals are still awaiting shareholders' approval, here's a look at the other two - Hexaware and Vedanta.

Baring PE could successfully delist Hexaware, but Anil Agarwal ran out of luck to delist Vedanta from Indian bourses.

Vedanta – Announced on May 18

Hexaware – Announced on June 20

Adani Power – Announced on May 29

Allcargo Logistics – Announced on Aug 24

The successful delisting of Hexaware excited the Street as a lot of traders and investors built up positions in Vedanta in anticipation of quick bucks. However, that wasn’t the case as Vedanta failed to secure 90 percent of shares held by public investors for the delisting process to be successful.

Reverse book-building opened on Sept 9 and closed on Sept 16

The floor price was at Rs 264.97/share

Discovered price of Rs 475/share accepted by Barings PE

More than 90 percent of shares got tendered, hence delisting was successful

Reverse book-building opened on Oct 5 and closed on Oct 9

The floor price was Rs 87.25 per share

Co failed to garner 90 percent shares required for delisting

LIC, the largest institutional shareholder, tendered shares at Rs 320/share

Delisting offer deemed failed

However, the larger point is while stock market participants get immediately excited about prospects of a quick buck as soon as delisting is announced, the recent history suggests more shareholders have lost money on failed delistings than gained on successful ones.

Hexaware (Size - Rs 5,405 crore) – Successful

Vedanta – Failed

Linde India (Size - Rs 4,317 crore) – Failed

Ineos Styrolution (Size - Rs 1,842 crore) – Failed

Polaris Consulting (Size - Rs 1,268 crore) – Successful

Claris Life (Size - Rs 1,086 crore) – Successful

Infinite Computer Solutions (Size - Rs 400 crore) – Successful

Essar Oil (Size - Rs 3,744 crore) – Successful

Essar Ports (Size - Rs 1,427 crore) - Successful

Fulford India (Size - Rs 234 crore) – Successful

Xchanging Solutions (Size - Rs 303 crore) – Failed

Panasonic Appliance India (Size - Rs 96 crore) – Successful